Hawkins (HWKN) 10-Q 8 Feb 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2017	Feb. 02, 2018
Document Information [Line Items]
Entity Registrant Name	HAWKINS INC
Entity Central Index Key	46,250
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--04-01
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		10,695,184

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 02, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 7,635	$ 6,861
Trade receivables — less allowance for doubtful accounts: $526 as of December 31, 2017 and $468 as of April 2, 2017	57,867	57,298
Inventories	62,736	51,249
Income taxes receivable	0	1,273
Prepaid expenses and other current assets	4,818	4,238
Total current assets	133,056	120,919
PROPERTY, PLANT, AND EQUIPMENT:
PROPERTY, PLANT, AND EQUIPMENT:	235,742	221,518
Less accumulated depreciation	110,649	99,978
Net property, plant, and equipment	125,093	121,540
OTHER ASSETS:
Goodwill	97,556	97,556
Intangible assets, net	72,603	76,883
Other	2,436	1,686
Total other assets	172,595	176,125
Total assets	430,744	418,584
CURRENT LIABILITIES:
Accounts payable — trade	28,077	29,756
Dividends payable	0	4,466
Accrued payroll and employee benefits	6,992	9,979
Income tax payable	46	0
Current portion of long-term debt	9,864	7,989
Due to sellers of acquired business	0	341
Container deposits	1,233	1,174
Other current liabilities	2,335	1,967
Total current liabilities	48,547	55,672
LONG-TERM DEBT, LESS CURRENT PORTION	104,228	94,626
PENSION WITHDRAWAL LIABILITY	5,728	5,968
DEFERRED INCOME TAXES	25,315	42,040
OTHER LONG-TERM LIABILITIES	3,634	2,450
Total liabilities	187,452	200,756
COMMITMENTS AND CONTINGENCIES	0	0
SHAREHOLDERS’ EQUITY:
Common stock; authorized: 30,000,000 shares of $0.05 par value; 10,631,992 and 10,582,596 shares issued and outstanding as of December 31, 2017 and April 2, 2017, respectively	531	529
Additional paid-in capital	53,016	51,104
Retained earnings	189,386	165,897
Accumulated other comprehensive income	359	298
Total shareholders’ equity	243,292	217,828
Total liabilities and shareholders’ equity	$ 430,744	$ 418,584

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 02, 2017
Statement of Financial Position [Abstract]
Allowance for doubtful accounts, trade receivables	$ 526	$ 468
Shares authorized	30,000,000	30,000,000
Common stock, par value (usd per share)	$ 0.05	$ 0.05
Common Stock, Shares, Issued	10,631,992	10,582,596
Common Stock, Shares, Outstanding	10,631,992	10,582,596

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017
Income Statement [Abstract]
Sales	$ 118,053	$ 112,351	$ 377,179	$ 364,975
Cost of sales	(99,213)	(91,439)	(308,225)	(288,815)
Gross profit	18,840	20,912	68,954	76,160
Selling, general and administrative expenses	(14,139)	(14,916)	(44,733)	(44,913)
Operating income	4,701	5,996	24,221	31,247
Interest expense, net	(857)	(634)	(2,423)	(1,977)
Income before income taxes	3,844	5,362	21,798	29,270
Income tax benefit (expense)	13,299	(1,811)	6,386	(10,925)
Net income	$ 17,143	$ 3,551	$ 28,184	$ 18,345
Weighted average number of shares outstanding - basic	10,609,078	10,538,328	10,599,232	10,529,259
Weighted average number of shares outstanding - diluted	10,648,232	10,595,140	10,641,578	10,592,550
Basic earnings per share
Basic earnings per share	$ 1.62	$ 0.34	$ 2.66	$ 1.74
Diluted earnings per share
Diluted earnings per share	1.61	0.34	2.65	1.73
Cash dividends declared per common share	$ 0	$ 0	$ 0.44	$ 0.42

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017
Net income	$ 17,143	$ 3,551	$ 28,184	$ 18,345
Other comprehensive income (loss), net of tax:
Total comprehensive income	17,267	3,944	28,245	18,622
Interest Rate Swap [Member]
Other comprehensive income (loss), net of tax:
Unrealized gain on interest rate swap	$ 124	$ 393	$ 61	$ 277

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 28,184	$ 18,345
Reconciliation to cash flows:
Depreciation and amortization	16,759	15,453
Amortization of debt issuance costs	102	102
Gain on deferred compensation assets	(99)	0
Deferred income taxes	(16,765)	171
Stock compensation expense	1,209	1,650
Gain from property disposals	(17)	(61)
Changes in operating accounts providing (using) cash:
Trade receivables	(471)	7,275
Inventories	(11,487)	(2,537)
Accounts payable	(990)	(7,456)
Accrued liabilities	(1,057)	(1,928)
Income taxes	977	848
Other	(1,785)	(869)
Net cash provided by operating activities	14,560	30,993
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment	(17,002)	(15,811)
Acquisitions, net of cash acquired	0	(2,199)
Other	298	264
Net cash used in investing activities	(16,704)	(17,746)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid	(9,161)	(8,683)
New shares issued	704	553
Net proceeds from (payments on) revolver borrowings	17,000	(13,000)
Payments on term loan borrowings	(5,625)	(3,750)
Net cash provided by (used in) financing activities	2,918	(24,880)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	774	(11,633)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	6,861	20,014
CASH AND CASH EQUIVALENTS, END OF PERIOD	7,635	8,381
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for income taxes	9,064	9,976
Cash paid for interest	2,229	1,746
Noncash investing activities - capital expenditures in accounts payable	$ 269	$ 1,076

Basis of Presentation

Basis of Presentation	9 Months Ended
	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, accordingly, do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended April 2, 2017 , previously filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly our financial position and the results of our operations and cash flows for the periods presented. All adjustments made to the interim condensed consolidated financial statements were of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The accounting policies we follow are set forth in Note 1 – Nature of Business and Significant Accounting Policies to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended April 2, 2017 , previously filed with the SEC. There has been no significant change in our accounting policies since the end of fiscal 2017 . The results of operations for the nine months ended December 31, 2017 are not necessarily indicative of the results that may be expected for the full year. References to fiscal 2017 refer to the fiscal year ended April 2, 2017 and references to fiscal 2018 refer to the fiscal year ending April 1, 2018 . Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-02, which provides new accounting guidance requiring lessees to recognize most leases as assets and liabilities on the balance sheet. This guidance will be effective for annual periods beginning after December 15, 2018 (our fiscal year ending March 30, 2020) and interim periods within those annual periods. We are currently evaluating the impact of this accounting pronouncement on our results of operations and financial position. In January 2016, the FASB issued ASU 2016-01, which provides guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This guidance will be effective for annual reporting periods beginning after December 15, 2017 (our fiscal year ending March 31, 2019), and interim periods within those annual periods. Early adoption is not permitted. We are currently evaluating the impact that this guidance will have on our results of operations and financial position. In May 2014, the FASB issued ASU 2014-09, which provides new accounting requirements for recognition of revenue from contracts with customers. The requirements of the new standard will be effective for annual reporting periods beginning after December 15, 2017 (our fiscal year ending March 31, 2019), and interim periods within those annual periods. We have performed a preliminary evaluation of the effect of adoption on our consolidated financial statements, and we do not currently expect a material impact on our results of operations, cash flows or financial position. The majority of our revenue arrangements generally consist of a single performance obligation to transfer promised goods or services. In limited circumstances, we manufacture products for customers that are unique to their specifications. We anticipate we will expand our consolidated financial statement disclosures to comply with the ASU. We plan to adopt these standards beginning with the first quarter of fiscal 2019 using the modified retrospective approach. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, which provides accounting guidance intended to improve the accounting for share-based payment transactions. This guidance outlines new provisions intended to simplify various aspects related to accounting for share-based payments and their presentation in the financial statements. We adopted this guidance in the first quarter of fiscal 2018. We will continue to estimate forfeitures as we determine compensation cost each period. The primary impact on our consolidated financial statements is the recognition of excess tax benefits in the provision for income taxes rather than additional paid-in capital, which may result in increased volatility in the reported amounts of income tax expense and net income. In July 2015, the FASB issued ASU 2015-11, which requires companies to change the measurement principal for inventory measured using the first-in, first-out (“FIFO”) or average cost method from the lower of cost or market to the lower of cost and net realizable value. Treatment of inventory valued under the last-in, last-out (“LIFO”) method is unchanged by this guidance. We adopted this guidance in the first quarter of fiscal 2018 and there was no impact to our financial position or results of operations.

Earnings per Share

Earnings per Share	9 Months Ended
	Dec. 31, 2017
Earnings Per Share [Abstract]
Earnings per Share	Earnings per Share Basic earnings per share (“EPS”) are computed by dividing net earnings by the weighted-average number of common shares outstanding. Diluted EPS includes the incremental shares assumed to be issued as performance units and restricted stock. Basic and diluted EPS were calculated using the following: Three Months Ended Nine Months Ended December 31, January 1, December 31, January 1, Weighted-average common shares outstanding—basic 10,609,078 10,538,328 10,599,232 10,529,259 Dilutive impact of performance units and restricted stock 39,154 56,812 42,346 63,291 Weighted-average common shares outstanding—diluted 10,648,232 10,595,140 10,641,578 10,592,550 For each of the three and nine months ended December 31, 2017 and January 1, 2017 , there were no shares excluded from the calculation of weighted-average common shares for diluted EPS.

Derivative Instruments

Derivative Instruments	9 Months Ended
	Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities Disclosure [Text Block]	Derivative Instruments On September 20, 2016, we entered into an interest rate swap agreement to manage the risk associated with a portion of our variable-rate long-term debt. We do not utilize derivative instruments for speculative purposes. The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange of the underlying notional amount on which the interest payments are calculated. The new swap agreement began September 1, 2017 and will terminate concurrently with the expiration of our credit facility on December 23, 2020. The notional amount of the swap agreement is $40 million from September 1, 2017 through August 31, 2018, $30 million from September 1, 2018 through August 31, 2019 and $20 million from September 1, 2019 through December 23, 2020. We have designated this swap as a cash flow hedge and have determined that it qualifies for hedge accounting treatment. For so long as the hedge is effective, changes in fair value of the cash flow hedge are recorded in other comprehensive income (net of tax) until income or loss from the cash flows of the hedged item is realized. For the each of the three and nine months ended December 31, 2017 , we recorded $0.1 million in other comprehensive income related to unrealized gains (net of tax) on the cash flow hedge described above. For the three months and nine months ended January 1, 2017 we recorded $0.4 million and $0.3 million , respectively, in other comprehensive income related to unrealized gains (net of tax) on the cash flow hedge. Included in other long-term assets on our condensed consolidated balance sheet was $0.6 million as of December 31, 2017 and $0.5 million as of April 2, 2017 related to the cash flow hedge. Unrealized gains and losses will be reflected in net income when the related cash flows or hedged transactions occur and offset the related performance of the hedged item. By their nature, derivative instruments are subject to market risk. Derivative instruments are also subject to credit risk associated with counterparties to the derivative contracts. Credit risk associated with derivatives is measured based on the replacement cost should the counterparty with a contract in a gain position to us fail to perform under the terms of the contract. We do not anticipate nonperformance by the counterparty.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value, Measurement Inputs, Disclosure [Text Block]	Fair Value Measurements Our financial assets and liabilities are measured at fair value at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We classify the inputs used to measure fair value into the following hierarchy: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for the asset or liability. Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity. These fair values are determined using pricing models for which the assumptions utilize management’s estimates or market participant assumptions. Assets and Liabilities Measured at Fair Value on a Recurring Basis. The fair value hierarchy requires the use of observable market data when available. In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Our financial assets that are measured at fair value on a recurring basis are an interest rate swap and assets held in a deferred compensation retirement plan. Both of these assets are classified as other long-term assets on our balance sheet, with the portion of the deferred compensation retirement plan assets expected to be paid within twelve months reclassified to current assets. The fair value of the interest rate swap is determined by the respective counterparties based on interest rate changes. Interest rate swaps are valued based on observable interest rate yield curves for similar instruments. The deferred compensation plan assets relate to contributions made to a non-qualified compensation plan, established in fiscal 2017, on behalf of certain employees who are classified as “highly compensated employees” as determined by IRS guidelines. The assets are part of a rabbi trust and the funds are held in mutual funds. The fair value of the deferred compensation is based on the quoted market prices for the mutual funds at the end of the period. The following table summarizes the balances of assets measured at fair value on a recurring basis as of December 31, 2017 and April 2, 2017 . 0 (In thousands) December 31, 2017 Level 1 Level 2 Level 3 Interest rate swap $ 604 — 604 — Deferred compensation plan assets $ 1,460 $ 1,460 — — (In thousands) April 2, 2017 Level 1 Level 2 Level 3 Interest rate swap $ 502 — $ 502 — Deferred compensation plan assets — — $ — —

Inventories

Inventories	9 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories at December 31, 2017 and April 2, 2017 consisted of the following: December 31, April 2, (In thousands) Inventory (FIFO basis) $ 65,597 $ 52,735 LIFO reserve (2,861 ) (1,486 ) Net inventory $ 62,736 $ 51,249 The FIFO value of inventories accounted for under the LIFO method was $42.7 million at December 31, 2017 and $37.0 million at April 2, 2017 . The remainder of the inventory was valued and accounted for under the FIFO method. The LIFO reserve increased $0.7 million during the three months ended December 31, 2017 and decreased $0.4 million during the three months ended January 1, 2017 . During the nine months ended December 31, 2017 , the LIFO reserve increased $1.4 million , while it decreased $0.8 million for the nine months ended January 1, 2017 . The valuation of LIFO inventory for interim periods is based on our estimates of year-end inventory levels and costs.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets The carrying amount of goodwill was $97.6 million as of December 31, 2017 and April 2, 2017 , of which $84.1 million was related to our Health and Nutrition segment. The annual goodwill impairment test we performed in fiscal 2017 indicated the excess fair value of this reporting unit was $7.4 million , or 4.8% . A summary of our intangible assets as of December 31, 2017 and April 2, 2017 is as follows: December 31, 2017 April 2, 2017 (In thousands) Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Finite-life intangible assets Customer relationships $ 78,383 $ (11,278 ) $ 67,105 $ 78,383 $ (7,854 ) $ 70,529 Trademarks and trade names 6,045 (2,315 ) 3,730 6,045 (1,790 ) 4,255 Other finite-life intangible assets 3,648 (3,107 ) 541 3,648 (2,776 ) 872 Total finite-life intangible assets 88,076 (16,700 ) 71,376 88,076 (12,420 ) 75,656 Indefinite-life intangible assets 1,227 — 1,227 1,227 — 1,227 Total intangible assets $ 89,303 $ (16,700 ) $ 72,603 $ 89,303 $ (12,420 ) $ 76,883

Debt

Debt	9 Months Ended
	Dec. 31, 2017
Debt Disclosure [Abstract]
Debt	Debt Debt at December 31, 2017 and April 2, 2017 consisted of the following: December 31, April 2, (In thousands) Senior secured term loan $ 87,500 $ 93,125 Senior secured revolving loan 27,000 10,000 Total debt 114,500 103,125 Less: unamortized debt issuance costs (408 ) (510 ) Total debt, net of debt issuance costs 114,092 102,615 Less: current portion of long-term debt (9,864 ) (7,989 ) Total long-term debt $ 104,228 $ 94,626

Income Taxes

Income Taxes	9 Months Ended
	Dec. 31, 2017
Income Tax [Abstract]
Income Tax Disclosure [Text Block]	Income Taxes On December 22, 2017 the Tax Cuts and Jobs Act of 2017 (the “Act”), was signed into law. The Act includes a number of provisions, including the lowering of the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. Because our fiscal 2018 ends April 1, 2018, our tax provision for the current year will be calculated utilizing a blended statutory federal rate of 31.5% . In future years, we expect our statutory federal rate to be 21% . Under generally accepted accounting principles, deferred tax assets and liabilities are required to be revalued during the period in which new tax legislation is enacted. As such, during the three months ended December 31, 2017, we revalued our net deferred tax liabilities to reflect the impact of the Act and recorded a one-time benefit of $13.2 million . Pursuant to SEC Staff Accounting Bulletin 118 (regarding the application of ASC 740 associated with the enactment of the Act), the tax benefit we recorded in the current quarter is provisional. The final impact of the Act may differ due to and among other things, changes in interpretations, assumptions made by the Company and the issuance of additional guidance that may be provided. Specifically, no adjustment was recorded during the three months ended December 31, 2017 related to the impact of the Act on state taxes, as we could not reasonably estimate the impact and do not expect any such impact to be material to our financial statements. We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The tax years prior to our fiscal year ended April 3, 2016 are closed to examination by the Internal Revenue Service. Our federal tax return filed for our fiscal year ended March 29, 2015 was examined by the Internal Revenue Service with no adjustments. For state and local income tax jurisdictions, the tax years prior to our fiscal year ended March 29, 2015 are closed to examination, with few exceptions. As of December 31, 2017 and April 2, 2017, our balance sheet included a long-term liability for uncertain tax positions of $0.2 million and $0.8 million , respectively, which arose from tax positions taken by Stauber on its tax returns for periods prior to our acquisition. Because the Stauber acquisition agreement provides us with indemnification by the prior owners for any tax liabilities relating to pre-acquisition tax returns, we have also recorded an offsetting, long-term receivable of $0.2 million as of December 31, 2017 and $0.8 million as of April 2, 2017. As a result, any change in the unrecognized tax benefit will not impact our effective tax rate in future periods. We expect these uncertain income tax amounts to decrease as the applicable examination periods for the relevant taxing authorities expire.

Share Based Compensation

Share Based Compensation	9 Months Ended
	Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Share-Based Compensation Performance-Based Restricted Stock Units . Our Board of Directors (the “Board”) approved a performance-based equity compensation arrangement for our executive officers during the first quarters of each of fiscal 2018 and fiscal 2017 . These performance-based arrangements provide for the grant of performance-based restricted stock units that represent a possible future issuance of restricted shares of our common stock based on a pre-tax income target for the applicable fiscal year. The actual number of restricted shares to be issued to each executive officer is determined when our final financial information becomes available after the applicable fiscal year and will be between zero shares and 57,855 shares in the aggregate for fiscal 2018 . The restricted shares issued will fully vest two years after the last day of the fiscal year on which the performance is based. We are recording the compensation expense for the outstanding performance share units and the converted restricted stock over the life of the awards. The following table represents the restricted stock activity for the nine months ended December 31, 2017 : Shares Weighted- Average Grant Date Fair Value Unvested at beginning of period 28,853 $ 43.10 Granted 35,075 47.50 Forfeited or expired (9,220 ) 45.45 Unvested at end of period 54,708 $ 45.52 We recorded compensation expense related to performance share units and restricted stock of $0.2 million and $0.7 million for the three and nine months ended December 31, 2017 , respectively. We recorded compensation expense related to performance share units and restricted stock of $0.4 million and $1.1 million for the three and nine months ended January 1, 2017 , respectively. Substantially all of the compensation expense was recorded in selling, general and administrative expenses in the condensed consolidated statements of income. Restricted Stock Awards . As part of their retainer, each non-employee director receives an annual grant of restricted stock for their Board of Director services. The restricted stock awards are expensed over the requisite vesting period, which is one year from the date of issuance, based on the market value on the date of grant. As of December 31, 2017 , there were 8,484 shares of restricted stock with a grant date fair value of $41.25 outstanding under this program. Compensation expense for the three months ended December 31, 2017 and January 1, 2017 related to restricted stock awards to the Board was $0.1 million . Compensation expense for the nine months ended December 31, 2017 and January 1, 2017 related to restricted stock awards to the Board was $0.3 million and $0.2 million , respectively.

Share Repurchase Program

Share Repurchase Program	9 Months Ended
	Dec. 31, 2017
Share Repurchase Program [Abstract]
Share Repurchase Program	Share Repurchase Program We have in place a share repurchase program approved by our Board of up to 300,000 shares of our outstanding common stock. Under the program, we are authorized to repurchase shares for cash on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. Upon repurchase of the shares, we reduce our common stock for the par value of the shares with the excess applied against additional paid-in capital. No shares were repurchased during the nine months ended December 31, 2017 or during fiscal 2017. As of December 31, 2017 , 112,546 shares remained available to be repurchased under the share repurchase program.

Litigation, Commitments and Con

Litigation, Commitments and Contingencies	9 Months Ended
	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Litigation, Commitments and Contingencies	Litigation, Commitments and Contingencies Litigation — There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which we or any of our subsidiaries are a party or of which any of our property is the subject. Legal fees associated with such matters are expensed as incurred.

Segment Information

Segment Information	9 Months Ended
	Dec. 31, 2017
Segment Reporting [Abstract]
Segment Information	Segment Information We have three reportable segments: Industrial, Water Treatment, and Health and Nutrition. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our fiscal 2017 Annual Report on Form 10-K. We evaluate performance based on profit or loss from operations before income taxes not including nonrecurring gains and losses. Reportable segments are defined primarily by product and type of customer. Segments are responsible for the sales, marketing and development of their products and services. Other than our Health and Nutrition segment, the segments do not have separate accounting, administration, customer service or purchasing functions. We allocate certain corporate expenses to our operating segments. There are no intersegment sales and no operating segments have been aggregated. No single customer’s revenues amounted to 10% or more of our total revenue. Sales are primarily within the United States and all assets are located within the United States. (In thousands) Industrial Water Treatment Health and Nutrition Total Three months ended December 31, 2017: Sales $ 60,337 $ 30,866 $ 26,850 $ 118,053 Gross profit 7,091 7,393 4,356 18,840 Selling, general, and administrative expenses 4,992 4,643 4,504 14,139 Operating income 2,099 2,750 (148 ) 4,701 Three months ended January 1, 2017: Sales $ 57,083 $ 28,098 $ 27,170 $ 112,351 Gross profit 8,371 7,242 5,299 20,912 Selling, general, and administrative expenses 5,467 4,808 4,641 14,916 Operating income 2,904 2,434 658 5,996 Nine months ended December 31, 2017: Sales $ 183,053 $ 107,307 $ 86,819 $ 377,179 Gross profit 24,372 29,624 14,958 68,954 Selling, general and administrative expenses 16,043 14,942 13,748 44,733 Operating income 8,329 14,682 1,210 24,221 Nine months ended January 1, 2017: Sales $ 176,717 $ 100,590 $ 87,668 $ 364,975 Gross profit 28,978 28,943 18,239 76,160 Selling, general and administrative expenses 16,254 14,825 13,834 44,913 Operating income 12,724 14,118 4,405 31,247 No significant changes to identifiable assets by segment occurred during the nine months ended December 31, 2017 .

Earnings per Share (Tables)

Earnings per Share (Tables)	9 Months Ended
	Dec. 31, 2017
Earnings Per Share [Abstract]
Summary of basic and diluted EPS	Basic earnings per share (“EPS”) are computed by dividing net earnings by the weighted-average number of common shares outstanding. Diluted EPS includes the incremental shares assumed to be issued as performance units and restricted stock. Basic and diluted EPS were calculated using the following: Three Months Ended Nine Months Ended December 31, January 1, December 31, January 1, Weighted-average common shares outstanding—basic 10,609,078 10,538,328 10,599,232 10,529,259 Dilutive impact of performance units and restricted stock 39,154 56,812 42,346 63,291 Weighted-average common shares outstanding—diluted 10,648,232 10,595,140 10,641,578 10,592,550

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]	The following table summarizes the balances of assets measured at fair value on a recurring basis as of December 31, 2017 and April 2, 2017 . 0 (In thousands) December 31, 2017 Level 1 Level 2 Level 3 Interest rate swap $ 604 — 604 — Deferred compensation plan assets $ 1,460 $ 1,460 — — (In thousands) April 2, 2017 Level 1 Level 2 Level 3 Interest rate swap $ 502 — $ 502 — Deferred compensation plan assets — — $ — —

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Dec. 31, 2017
Inventory Disclosure [Abstract]
Summary of Inventories	Inventories at December 31, 2017 and April 2, 2017 consisted of the following: December 31, April 2, (In thousands) Inventory (FIFO basis) $ 65,597 $ 52,735 LIFO reserve (2,861 ) (1,486 ) Net inventory $ 62,736 $ 51,249

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible assets and goodwill	A summary of our intangible assets as of December 31, 2017 and April 2, 2017 is as follows: December 31, 2017 April 2, 2017 (In thousands) Gross Amount Accumulated Amortization Net Gross Amount Accumulated Amortization Net Finite-life intangible assets Customer relationships $ 78,383 $ (11,278 ) $ 67,105 $ 78,383 $ (7,854 ) $ 70,529 Trademarks and trade names 6,045 (2,315 ) 3,730 6,045 (1,790 ) 4,255 Other finite-life intangible assets 3,648 (3,107 ) 541 3,648 (2,776 ) 872 Total finite-life intangible assets 88,076 (16,700 ) 71,376 88,076 (12,420 ) 75,656 Indefinite-life intangible assets 1,227 — 1,227 1,227 — 1,227 Total intangible assets $ 89,303 $ (16,700 ) $ 72,603 $ 89,303 $ (12,420 ) $ 76,883

Debt (Tables)

Debt (Tables)	9 Months Ended
	Dec. 31, 2017
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Debt at December 31, 2017 and April 2, 2017 consisted of the following: December 31, April 2, (In thousands) Senior secured term loan $ 87,500 $ 93,125 Senior secured revolving loan 27,000 10,000 Total debt 114,500 103,125 Less: unamortized debt issuance costs (408 ) (510 ) Total debt, net of debt issuance costs 114,092 102,615 Less: current portion of long-term debt (9,864 ) (7,989 ) Total long-term debt $ 104,228 $ 94,626

Share Based Compensation (Table

Share Based Compensation (Tables)	9 Months Ended
	Dec. 31, 2017
Performance-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Summary of performance-based restricted stock units	The following table represents the restricted stock activity for the nine months ended December 31, 2017 : Shares Weighted- Average Grant Date Fair Value Unvested at beginning of period 28,853 $ 43.10 Granted 35,075 47.50 Forfeited or expired (9,220 ) 45.45 Unvested at end of period 54,708 $ 45.52

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Dec. 31, 2017
Segment Reporting [Abstract]
Summary of Segment Information	(In thousands) Industrial Water Treatment Health and Nutrition Total Three months ended December 31, 2017: Sales $ 60,337 $ 30,866 $ 26,850 $ 118,053 Gross profit 7,091 7,393 4,356 18,840 Selling, general, and administrative expenses 4,992 4,643 4,504 14,139 Operating income 2,099 2,750 (148 ) 4,701 Three months ended January 1, 2017: Sales $ 57,083 $ 28,098 $ 27,170 $ 112,351 Gross profit 8,371 7,242 5,299 20,912 Selling, general, and administrative expenses 5,467 4,808 4,641 14,916 Operating income 2,904 2,434 658 5,996 Nine months ended December 31, 2017: Sales $ 183,053 $ 107,307 $ 86,819 $ 377,179 Gross profit 24,372 29,624 14,958 68,954 Selling, general and administrative expenses 16,043 14,942 13,748 44,733 Operating income 8,329 14,682 1,210 24,221 Nine months ended January 1, 2017: Sales $ 176,717 $ 100,590 $ 87,668 $ 364,975 Gross profit 28,978 28,943 18,239 76,160 Selling, general and administrative expenses 16,254 14,825 13,834 44,913 Operating income 12,724 14,118 4,405 31,247

Earnings per Share (Details)

Earnings per Share (Details) - shares	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017
Summary of basic and diluted EPS
Weighted-average common shares outstanding—basic	10,609,078	10,538,328	10,599,232	10,529,259
Dilutive impact of performance units and restricted stock	39,154	56,812	42,346	63,291
Weighted-average common shares outstanding—diluted	10,648,232	10,595,140	10,641,578	10,592,550

Earnings per Share (Details Tex

Earnings per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017
Earnings Per Share [Abstract]
Shares or stock options excluded from the calculation of diluted EPS	0	0	0	0

Derivative Instruments (Details

Derivative Instruments (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017	Apr. 02, 2017
Derivative [Line Items]
Cash Flow Hedge Derivative Instrument Assets at Fair Value	$ 604		$ 604		$ 502
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	124	$ 393	61	$ 277
Debt Instrument, Redemption, Period One [Member]
Derivative [Line Items]
Derivative, Notional Amount	40,000		40,000
Debt Instrument, Redemption, Period Two [Member]
Derivative [Line Items]
Derivative, Notional Amount	30,000		30,000
Debt Instrument, Redemption, Period Three [Member]
Derivative [Line Items]
Derivative, Notional Amount	$ 20,000		$ 20,000

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 02, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	$ 1,460	$ 0
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	1,460	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	0	0
Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Flow Hedge Derivative Instrument Assets at Fair Value	604	502
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Flow Hedge Derivative Instrument Assets at Fair Value	0	0
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Flow Hedge Derivative Instrument Assets at Fair Value	604	502
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash Flow Hedge Derivative Instrument Assets at Fair Value	$ 0	$ 0

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 02, 2017
Summary of Inventories
Inventory (FIFO basis)	$ 65,597	$ 52,735
LIFO reserve	(2,861)	(1,486)
Net inventory	$ 62,736	$ 51,249

Inventories (Details Textual)

Inventories (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017	Apr. 02, 2017
Inventory Disclosure [Abstract]
Finished goods (LIFO basis)	$ 42.7		$ 42.7		$ 37
Increase (decrease) in LIFO reserve	$ 0.7	$ (0.4)	$ 1.4	$ (0.8)

Goodwill and Intangible Asset32

Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 02, 2017
Goodwill [Line Items]
Goodwill	$ 97,556	$ 97,556
Health and Nutrition [Member]
Goodwill [Line Items]
Goodwill	$ 84,100
Reporting Unit, Amount of Fair Value in Excess of Carrying Amount		$ 7,400
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount		4.80%

Goodwill and Intangible Asset33

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 02, 2017
Summary of Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, Gross Carrying Amount	$ 88,076	$ 88,076
Finite-life intangible assets, Accumulated Amortization	(16,700)	(12,420)
Total finite-life intangible assets, Net	71,376	75,656
Indefinite-life intangible assets gross	1,227	1,227
Indefinite-life intangible assets, Accumulated Amortization	0	0
Indefinite-life intangible assets	1,227	1,227
Total Intangible Assets, Gross	89,303	89,303
Total intangible assets, net	72,603	76,883
Customer Relationships [Member]
Summary of Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, Gross Carrying Amount	78,383	78,383
Finite-life intangible assets, Accumulated Amortization	(11,278)	(7,854)
Total finite-life intangible assets, Net	67,105	70,529
Trademarks [Member]
Summary of Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, Gross Carrying Amount	6,045	6,045
Finite-life intangible assets, Accumulated Amortization	(2,315)	(1,790)
Total finite-life intangible assets, Net	3,730	4,255
Other finite-life intangible assets [Member]
Summary of Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, Gross Carrying Amount	3,648	3,648
Finite-life intangible assets, Accumulated Amortization	(3,107)	(2,776)
Total finite-life intangible assets, Net	$ 541	$ 872

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 02, 2017
Debt Instrument [Line Items]
Long-term Debt	$ 114,500	$ 103,125
Less: unamortized debt issuance costs	(408)	(510)
Total debt, net of debt issuance costs	114,092	102,615
Less: current portion of long-term debt	(9,864)	(7,989)
Total long-term debt	104,228	94,626
Term Loan [Member]
Debt Instrument [Line Items]
Long-term Debt	87,500	93,125
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 27,000	$ 10,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Mar. 31, 2019	Apr. 02, 2017
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		31.50%		35.00%
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability	$ (13.2)
Unrecognized Tax Benefits	0.2	$ 0.2		$ 0.8
Business Combination, Indemnification Assets, Amount as of Acquisition Date	$ 0.2	$ 0.2		$ 0.8
Scenario, Forecast [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			21.00%

Share Based Compensation (Detai

Share Based Compensation (Details) - Performance-Based Restricted Stock [Member]	9 Months Ended
	Dec. 31, 2017$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested at beginning of period (Shares) | shares	28,853
Granted (Shares) | shares	35,075
Forfeited or expired (Shares) | shares	(9,220)
Unvested at end of period (Shares) | shares	54,708
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Beginning Balance, Weighted average grant date fair value (usd per share) | $ / shares	$ 43.10
Granted, Weighted average grant date fair value (usd per share) | $ / shares	47.50
Forfeited or expired, Weighted average grant date fair value (usd per share) | $ / shares	45.45
Ending Balance, Weighted average grant date fair value (usd per share) | $ / shares	$ 45.52

Share Based Compensation (Det37

Share Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017
Performance-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of restricted stock to be issued minimum (shares)			0
Range of restricted stock to be issued maximum (shares)			57,855
Vesting period			2 years
Compensation expense	$ 0.2	$ 0.4	$ 0.7	$ 1.1
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			1 year
Compensation expense	$ 0.1	$ 0.1	$ 0.3	$ 0.2
Restricted stock awards outstanding (shares)	8,484		8,484
Restricted stock awards, weighted average exercise price (usd per share)	$ 41.25		$ 41.25

Share Repurchase Program (Detai

Share Repurchase Program (Details) - shares	9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017
Share Repurchase Program [Abstract]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	300,000
Stock Repurchased During Period, Shares	0	0
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	112,546

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Jan. 01, 2017	Dec. 31, 2017	Jan. 01, 2017
Segment Reporting Information [Line Items]
Sales	$ 118,053	$ 112,351	$ 377,179	$ 364,975
Gross profit	18,840	20,912	68,954	76,160
Selling, general, and administrative expenses	14,139	14,916	44,733	44,913
Operating income	4,701	5,996	24,221	31,247
Industrial [Member]
Segment Reporting Information [Line Items]
Sales	60,337	57,083	183,053	176,717
Gross profit	7,091	8,371	24,372	28,978
Selling, general, and administrative expenses	4,992	5,467	16,043	16,254
Operating income	2,099	2,904	8,329	12,724
Water Treatment [Member]
Segment Reporting Information [Line Items]
Sales	30,866	28,098	107,307	100,590
Gross profit	7,393	7,242	29,624	28,943
Selling, general, and administrative expenses	4,643	4,808	14,942	14,825
Operating income	2,750	2,434	14,682	14,118
Health and Nutrition [Member]
Segment Reporting Information [Line Items]
Sales	26,850	27,170	86,819	87,668
Gross profit	4,356	5,299	14,958	18,239
Selling, general, and administrative expenses	4,504	4,641	13,748	13,834
Operating income	$ (148)	$ 658	$ 1,210	$ 4,405

Segment Information (Details Te

Segment Information (Details Textual) $ in Millions	9 Months Ended
	Dec. 31, 2017USD ($)SegmentCustomer
Segment Reporting Information [Line Items]
Number of reportable segments (segments)	3
Intersegment sales | $	$ 0
Number of operating segments aggregated (segments)	0
Number of customer representing 10 percent or more of revenue (customers) | Customer	0
Quarterly Financial Information, Segment Reporting, Segment Assets, Material Change	0